COA: P165-M DAP funds used to pay congressional franking privilege

SOME P165 million from the Disbursement Acceleration Program (DAP) was spent for the payment of congressional franking privilege and premium payments of the Philippine Postal Corporation (PPC) for its employees' retirement and health insurance, the Commission on Audit (COA) reported Wednesday.

In its 2013 annual report for PPC, COA said the state-owned corporation received a total P644 million in DAP funds in 2011 and spent P479 million of the amount to repurchase its Quezon City post office property from a commercial bank that foreclosed it.

COA examiners has recommended and called for an investigation into the failure of PPC officials and its personnel to reconcile and account for the cash advances and file criminal or administrative charges, if warranted.

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The audit report revealed that the P65 million of DAP allocation was spent to cover employers contributions to the Government Service Insurance System (GSIS) and the Philippine Health Insurance Corporation (PhilHealth) while P100 million was transferred to the PPC supposedly to cover expenses for the franking privileges of members of Congress.

A franking privilege refers to the right of members of the House of Representatives and the Senate to transmit mail matters under their signature at the expense of government.

"The balance of P165 million was entirely used by PPC for remittance of its GSIS premium contributions and nothing was paid for PHIC premiums contributions and franking privileges," noted COA.

The COA noted that they sought a clarification from Budget Secretary Florencio Abad to determine if his office had indeed authorized PPC to pay DAP funds to cover GSIS premiums.

In response to the COA query, Budget Undersecretary Luz Cantor, in a letter, said, "Since the release of P100million forms part of PPCs revenue, PPC has the discretion to identify and settle its priority obligations. In the instant case, PPC utilized the whole Amount of P165 million to settle its unpaid obligations with the GSIS."

The COA also said that over P4 billion in conditional cash transfer funds distributed to poor families in 2013 were not liquidated for the year.

This prompted auditors to demand PPC to pinpoint responsibility and if warranted, take legal action against them.

The COA noted that the P2.282 billion of the P4.72 billion in CCT funds distributed for the year was belatedly liquidated two months ago, but auditors remained apprehensive about the veracity of the liquidation reports.

"However, these liquidation reports were stated in lump sum amounts without details or breakdown that could be matched with the individual Certification of Liquidatioin issued by the DSWD," the report submitted by COA Director IV Rufina Laquidanum stated.

The audit agency also noted huge shortages in the fund, saying that a total P13.53 million in PPC funds was infused to the CCT program to cover cash shortages resulting in "alleged robberies/holdups suffered in carrying out the 4Ps".

Auditors see the PPC move as an act of "relieving the accountable officers for the unliquidated cash advances granted them."

The PPC headed by Postmaster General and former Bulacan governor Josefina de la Cruz was placed responsible in distributing a portion of government's dole-out program for the poor or the CCT, also known as the 4Ps or the Pantawid Pamilyang Pilipino Program.

The PPC has been tapped by the Land Bank of the Philippines (LBP) for help in quickly and safely distributing CCT proceeds to beneficiaries.

Last year, the government-owned bank gave PPC P5.23 billion for delivery to beneficiaries of the CCT program but only P748.60 million was fully accounted through liquidation as of December 31, 2013.

"Of the unliquidated cash advances of P4.937 billion, the amount of P4.727 billion was overdue, and P0.209 billion were still in the custody of the Cluster Postmaster Head awaiting for the DSWD advice on the actual date of distribution to the beneficiaries," the audit report stated.

In response, the PPC management pinpointed the lack of manpower and the "unexpected and sudden increase" in volume of CCT transactions.

But the state auditors warned that the weak or even seemingly lack of processing, internal accounting and reporting controls in the implementation and operations of the CCT program, if not addressed immediately, would further result in unmanageable proportion of unliquidated cash advances.

The audit agency also stressed that "excess or undistributed cash" still being held by payout postmasters cold expose the funds to malversation, theft or other risks.

"Strictly require the CCT payout postmasters to immediately liquidate their cash advances as soon as the cash grants are delivered to the beneficiaries; and if possible, strictly impose sanctions on those who deliberately failed to liquidated their cash advances within the prescribed period," COA recommended. (Sunnex)

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